Category Archives: CADCHF

CADCHF 240 and 60 minutes – An Update

I wanted to have another look at this pair which I first presented here in early May. The methodology that we use seeks to identify the path of price at an early stage and then to delineate or define it by means of a pitchfork. It is not the pitchfork itself that is important but the angle ascent or descent that it follows. By matching price to this angle we can then monitor the strengthening or weakening of trend as it progresses.

cadchf-2-240-chart1

We last looked at this pair in the area of the puce circle in Chart 1. We had been following as price rose from the puce Sliding Parallel following the series of touches in the green circles and had noted the constant line of resistance as shown by the higher puce Sliding Parallel. The validation given by the price action along these lines was sufficient for us to continue to follow it. Note how price moved strongly higher from the last green circle running into resistance at the higher puce Sliding Parallel and then falling back to find support along the grey horizontal.

Although we spend the majority of our analysis looking at movements in the angle of our pitchfork we are not immune to what happens along the horizontal. Here the fact that resistance later became support was noticed and deemed to be bullish. From this support price moved higher again before running into resistance once more along the same puce Sliding Parallel. Note how we are following support stepping up in the angle of the fork – from the line of green circles, to the arrowed blue Sliding Parallel beneath the Median Line and now to a higher arrowed Sliding Parallel shown in green. It is normal to expect resistance to be put under pressure when we see support stepping up and members of the Cross Pair Analysis service have been aware of this and watching these moves unfold.

We are looking to see if there is enough upside pressure to push through the puce Sliding Parallel that has acted as resistance since early April. It is less the breach of this line itself that is important but more where we find support on any retracement. If, for example, price pushed above the line and came back to test it from above and found support along it that would be a bullish indicator and would have us looking to challenge the higher line of the Upper Parallel that had been resistance once before.

cadchf-2-60-chart2

One feature of the Cross Pair Analysis is that we look at vehicles across various timeframes. Chart 2 shows the same pair on a 60 minute basis and Chart 3 shows the same vehicle in more detail. Note how once more we use a distinct A, B and C to draw our pitchfork – this time it is a variant known as a Schiff or Unmodified Schiff. Here the origin of the fork is moved 50% in price from the A pivot to the B pivot.

Chat 3 shows the validation that we found on this fork – the series of red circles denoting the activity that we saw along the Median Line of the fork and which told us that we had correctly defined the path of price. Note how we use the same techniques to mark a strengthening of trend along the path of price. Resistance in mid-June along the quartile of the fork moved higher to the Sliding Parallel just under the Upper Parallel and support along the Median Line also moved up to the Sliding Parallel denoted by the up facing red arrows. (Note incidentally that when this puce Sliding Parallel support briefly breached that support was found along the Median Line once more…)

cadchf-2-60-chart3

In the last day or so the puce Sliding Parallel resistance has been breached to the upside and we have seen price come back and start to establish support along this same line. We potentially have a bullish higher channel forming with the puce Sliding Parallel as new support and a higher green Sliding Parallel as resistance. We will continue to monitor this chart and use the shorter timeframe as a “canary in the ine” for our longer timeframe 240 minute chart.

The Cross Pair Analysis service looks  to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch here:
http://www.coghlancapital.com/node/8759

I will be hosting another free webinar on Wednesday 9th July – registration is available at this link:
http://www.coghlancapital.com/node/9207

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Angle of Ascent – CADCHF 240 minute

Median Line Analysis using pitchforks seeks at an early stage to establish and then to define the path of price – the angle of ascent or descent of a vehicle. Having done this we then look to follow the strengthening or weakening of trend along the lines that we have drawn. The methodology allows us to predict likely areas of support and resistance in the line of the pitchfork with considerable accuracy.

cadchf-240-chart1

I have posted this chart before and noted how price has moved consistently along the angle of the pitchfork that we have drawn – how it has moved between support along the green Sliding Parallel and resistance along the puce one. An essential part of validating a pitchfork – determining whether we are indeed describing the path of price – is to look for continuing action in the angle of ascent (or descent) that we have drawn. In this case we noted the first red circle showing resistance at the Upper Parallel – something which caused us to keep a close watch on the fork for further confirmation. This came with activity along the Median Line of the fork where the line clearly showed both support and resistance as price evolved.

Specifically we watched how things developed along the puce Sliding Parallel – a series of exact touches and bounces as shown in the green circles were clear evidence of the line providing a constant line of support. The fourth green circle shows how price moved from the line at 0.7987 to a high of 0.8291 at the end of May.  A trader could have taken a low-risk, high-probability long trade from the puce Sliding Parallel, with a stop beneath previous low of 15-20 points.

Even though we spend the majority of our time following the movement of price in the angle of the pitchfork we are not immune to what happens on the horizontal. The vast majority of traders are looking at the latter patterns and the result is that price often reacts to these horizontal levels. In this case the grey line has provided both support and resistance to this vehicle as evidenced by the series of red circles.

What we do is try to put the package together. The initial move higher from the last green circle did encounter anticipated resistance in the second red circle along the horizontal. Median Line Analysis allowed us to follow support stepping up in the angle of the fork from the puce Sliding Parallel to the previously active Median Line and this led us to anticipate that price would indeed move higher. It pushed through the horizontal – falling back to find support along it – before reaching anticipated resistance a couple of times along the line of the green Sliding Parallel.

Since the last high in the first puce circle price has dropped back somewhat – it appears to be potentially lowering in the line of the fork. The three puce circles show resistance at the green Sliding Parallel, then beneath it at the blue dashed quartile and lastly at a slightly lower level once more. It must be stressed that these moves have not yet played themselves out and price could push higher once more, likely to the anticipated Sliding Parallel resistance or even higher to the Upper Parallel. However the potential lowering of resistance is something we will follow over the coming bars. We are also noting how price has once more found support along the grey horizontal – you could argue that we were effectively forming a wedge in the line of the fork.

As I stated earlier we use the strengthening and weakening of trend along the lines of the pitchfork to determine the movements of price of a vehicle. I hope I have shown how the methodology can give us high probability areas of support and resistance within the trend that we have identified.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

A Quick Update – CADCHF 240 minute

I have looked at this vehicle in a previous article and discussed how it could be followed and traded using the methodology of Median Line Analysis. What we look to do at an early stage of a trend is to seek out and define the path of price of a pair and, having done that, use the lines of support and resistance that soon become apparent.

Chart 1:

a1-cc

Chart 1 is a copy of the one I discussed in early May. We had quickly established this all-important path of price as the CADCHF moved above and away from the declining red lines of resistance. We used the distinct A, B and C pivots to draw our pitchfork and looked to validate it, ie to see if there was any price action along the angle of the lines that we had drawn in order to show that we were indeed tracking the path of price. The Upper Parallel resistance, the Median Line resistance and the puce Sliding Parallel support all confirmed this and we noted how a trade from this last line would have been low-risk and high-probability. Resistance was seen at the green horizontal from the early April spike high.

Let’s take a look at Chart 2 and see what has developed since then. After the rise from 0.7987 in the fourth green circle to the horizontal at 0.8160 we saw a small retracement. It is apparent from the action along the Median Line of the pitchfork how important this line has been in providing support and resistance since the first red arrow at the beginning of April. I have highlighted other instances of this with more red arrows. You can clearly see that after the green horizontal touch price fell back and found support along this Median Line. We noted this prior line of resistance was becoming support – a bullish indicator in the same way as it would be if we were looking at lines on the horizontal. The stepping up of support from the puce Sliding Parallel to the Median Line indicated a strengthening of trend along the angle of the fork and it was no surprise when price pushed higher and broke through the horizontal green resistance.

Chart 2:

a2-cc99

Respecting the supports and resistance along the path that we had drawn we encountered a pause precisely where anticipated – along the Sliding Parallel from the late March high originally to be found as a blue dotted line in Chart 1 – changed to a puce line in Chart 2 so that it is more apparent. Once more we see a retracement from anticipated resistance in the puce circle and we note how the vehicle falls back before finding support along the green horizontal. Again resistance becoming support is bullish and we watch another move higher before once again encountering resistance at the same Sliding Parallel in the second puce circle.

I will continue to monitor and trade this chart using the lines of support and resistance that Median Line Analysis has allowed me to identify. If price pushes through the current Sliding Parallel resistance I will look to the Upper Parallel as the next likely line of resistance – it acted as such in early April. Obviously if the puce Sliding Parallel was breached and then in turn became support, that would be further bullish action. However, if price moves lower I will look for continued support along the green horizontal and, beneath that, along he Median Line of the fork. We are tracking the strengthening and weakening of trend along the path of price that we have identified.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Still Running Well – CADCHF 240

I received an email following my last post about the CADCHF 240 asking about resistance becoming support and what that tells us. When we are looking at moves in terms of the horizontal we deem it to be bullish if resistance breaches and then becomes support. It is exactly the same when using Median Line Analysis except instead of using the horizontal we are using the path of price as defined by the angle of the pitchfork. We are looking at support and resistance along these angles so it is logical to view a breach of such resistance followed by support along it in the same way as we do on the horizontal.

Chart 1:

cc240-2

The email referred specifically to an instance of this to be seen in Chart 1. In early March there was a red dotted line of Sliding Parallel resistance that I have marked with green circles. We had been following the pair in downtrend for some time via the red fork and noted how price popped above the red Upper Parallel before declining once more. We marked the high of this move with the Sliding Parallel and continued to watch the movement of price.

Once more it moved above the Upper Parallel and in the second green circle not only pushed through the Sliding Parallel but came back to test it from above. The successful breach and retest of this line was a further factor leading us to the idea that the pair was about to move higher. This was one of the indications that we used, in conjunction with others listed in the previous article, and led us to draw the blue pitchfork in an attempt to define the new path of price that this change of behaviour had engendered.

I have detailed the validation of the blue fork in the previous article and it is interesting to note how well the lines in the fork have worked since my last comments. Remember that what we are attempting to do is to define the path of price of a vehicle by means of the pitchfork, creating channels by means of high probability lines or areas of support or resistance. There has been a strong move up from one of these lines – the Sliding Parallel highlighted in puce. This was a line that we had previously determined was providing support – it was a solid floor. By taking advantage of this line – and note how there was no reason on the horizontal for support to exist there – a trader could have taken a long with not only a high probability of success but also a tight stop to safeguard the position.

A long from the last low along the Sliding Parallel would have been at 0.7987 with a stop below the prior low of 0.7970 and an initial target of the Median Line (prior resistance) at 0.8105. In fact price has spiked through this potential resistance and I would now be looking to see if the green horizontal at 0.8160 does anything, or perhaps higher along the blue Sliding Parallel in the area of 0.8220. If price fell back I would look to see if the prior resistance of the Median Line now became support. Median Line Analysis does not guarantee that particular lines work – nobody can do that – but it does provide very accurate areas to look at for potential support and resistance.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

I recently hosted a webinar looking at these pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

I will be hosting another one on Tuesday 13th May – free registration available here:
https://www4.gotomeeting.com/register/145063263

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Stepping Down? – CADCHF 240

Median Line Analysis using pitchforks seeks to define and follow the path of price of a vehicle thereby providing traders with high probability areas of support and resistance. Members of the Cross Pairs Analysis service have been following this 240 minute chart for some time.

Through the early part f the year we were watching the vehicle decline and tracking the gradual stepping up of both support and resistance in the red downfork. In late March price moved above the red Upper Parallel and we started to look for a pitchfork whereby we could follow this change of behaviour.

Chart 1:

cc240

Chart 1 shows what we drew using the distinct A, B and C pivots. Of course until we started to see some validation along the lines of the fork we had no idea whether or not we were correctly defining the new path of price. The red circles show how we started to see action in the lines along the angle of the fork – there were three messy touches along the Median Line, two spiking touches along a Sliding Parallel and then a touch at the Upper Parallel before price fell away. Because all of this happened in the line of the fork we could rightly anticipate that further moves in price would also likely occur along the angle of ascent that we had drawn – ergo we had correctly defined the path of price.

Looking at the action since the Upper Parallel touch two things are apparent to me – firstly that there is a constant line of Sliding Parallel support (marked in purple) and secondly that there is a lowering of resistance as shown by the down facing red arrows. We have seen this resistance lower in the pitchfork from the Upper Parallel to the Median Line to a blue dotted Sliding Parallel and now potentially to the lower Quartile. Given this lowering of the ceiling we must be wary of a similar lowering of the floor – we must watch to see if support continues to hold along the purple Sliding Parallel as it has done where marked by the up facing red arrows. What we are seeing is a lowering or stepping down of resistance and a constant level of support – effectively we are seeing a wedge form in the pitchfork. it is important not to get wedded to the charts one is following but to adjust and update them as the vehicle progresses. We are using a powerful tool but one that needs to be monitored…..

We use Median Line Analysis and pitchforks to gauge the strengthening and weakening of trend along the lines that we have drawn. The methodology allows us to identify and utilise high probability areas of support and resistance in our trading.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

I recently hosted a webinar looking at non-dollar forex pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

I will be hosting another one on Tuesday 13th May – free registration available here:
https://www4.gotomeeting.com/register/145063263

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup